ONGC, its partners developing LNG terminal in Mozambique

May 18, 2015 12:00 AM

In a step towards start of gas production from its giant Mozambique gas fields, state-owned ONGC and its partners have awarded contract for development of an onshore LNG terminal.

About 75 trillion cubic feet of natural gas reserves found in offshore Rovuma Area-1, where Indian firms led by ONGC Videsh Ltd hold a total of 30 per cent stake, are to be converted into LNG for transportation by ships to consuming nations like India.
US firm Anadarko Petroleum Corp, the operator of the block, in a statement announced the selection of a consortium consisting of CB&I, Chiyoda Corporation and Saipem (CCS JV) for the initial development of the onshore LNG park in Mozambique.
"Selecting CCS JV for the development of the onshore Mozambique LNG park is a significant step toward reaching FID (Final Investment Decision) and demonstrates our continued commitment to advancing this important project toward first cargoes," said Anadarko Chairman, president and CEO, Al Walker.

The onshore LNG park includes two LNG trains, each with capacity of 6 million tons per annum, which is an increase of 1 million tons per train over the original plan.

"I am incredibly proud of our co-venture for all of the accomplishments achieved to date, including securing more than 8 million tonnes per annum in non-binding long-term off-take agreements, which are now progressing toward binding SPAs (Sales and Purchase Agreements)," he said.

The LNG park will include two storage tanks, each with capacity of 180,000 cubic meters, condensate storage, multi-berth marine jetty and associated utilities and infrastructure.

An estimated $18.4 billion will be required to bring first set of discoveries in Rovuma Area-1 on to production and convert that gas into liquid (liquefied natural gas or LNG) for ease of shipping to consuming nations like India.

OVL had in 2013 bought Videocon's 10 per cent stake in the Rovuma Area-1 for $2.475 billion. It followed this up by acquiring another 10 per cent stake in the same field from Anadarko Petroleum Corp of the US for $2.64 billion. The 10 per cent stake of Videocon was split in 60:40 ratio with Oil India Ltd (OIL).

Rovuma Area-1 Offshore Mozambique Block (Block Area 1) is located along the coasts of northern Mozambique and southern Tanzania in the Indian Ocean. It has a total area of more than 10,000 square kilometres in water depths ranging 900 metres to 1,600 metres and about 30-60 km from shore.

Woodlands, Texas-based energy-exploration company Anadarko is the operator of the block with 26.5 per cent stake while a unit of BPCL has 10 per cent interest. Other partners in Area 1 include Mitsui with 20 per cent stake, ENH (15 per cent) and PTTEP (8.5 per cent).

 

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